On July 6, 2021, Colombia’s Independence Day, President Ivan Duque presented a new $4 billion tax plan. The plan aimed to help pay for social programs and pandemic-related expenses. Due to Colombia’s new tax plan, thousands marched through Colombia’s main cities in protest. Many are angry at their government since it did not solve any of the populations’ problems. Colombian citizens believe that the new Colombia tax plan is not doing enough to help their people.
This new tax reform is much smaller than the previous $6.3 billion packages that the Colombian government presented in April 2021. The government withdrew the larger package due to mass demonstrations and lawmaker opposition. Even after many protests and marches, President Ivan Duque insisted that this plan is vital at a time of rising debt. The Colombian government must pass the plan to help social programs stay afloat.
As Duque opened Congress’s second legislative period of the year on Colombia’s Independence Day, Duque told legislators the “social investment law, which we will build between all of us, is the largest jump in human development in recent decades.”
The new reform places a higher tax burden on the company’s earnings. It discards the $6.3 billion package to impose a tax on basic items ranging from coffee to salt. The reason for protests for the new plan is that the plan seems to not be able to do enough for spending on education and job creation. In 2020, the economy contracted 7% and pushed an additional 3 million people into poverty, worsening conditions in Colombia.
The People of Colombia
Francisco Maltes is leading one of the groups of anti-government demonstrations while serving as the president of the Central Union of Workers. Malte’s union is part of a collection of unions that plans to present congress with 10 proposals on addressing Colombia’s social and economic crisis. Dissolving the nation’s riot police is part of their plans as well. This is creating a basic income program for workers that would make monthly payments of $260 to 10 million people. Maltes and his union tie directly into the recent string of protesting. Maltes has stated that protests will continue because President Duque has failed to solve Colombia’s list of problems.
During the Independence Day demonstrations, protestors also stated that they wanted justice for the death of many youths who police recently killed. Human Rights Watch is an international non-governmental organization that conducts research and advocacy for human rights. It is currently collecting data linking police to the deaths of 25 confirmed young protesters during the recent wave of demonstrations. The number of deaths still remains a mystery due to many local organizations stating that the death count could be higher.
Withdrawal of New Tax Reform
After many months, the Colombian government unveiled Colombia’s new tax plan, much to the Colombian people’s dismay. The purpose of the Colombia tax plan is to address the social and economic crisis. However, the verdict across Colombia’s population is clear. The verdict on the impact of the reform punishes the middle-working-class and ruins any hope of economic recovery. This will push many people into poverty. Unless an agreement comes to fruition in Congress in the coming months, Colombia could risk its post-pandemic social and economic recovery.
Colombia has a rare opportunity to create a better and more ambitious tax reform through the current circumstances. The leadership of President Duque must bring Colombia together and come to a consensus, to make a version of this proposed reform bill a reality.
– Aahana Goswami